Budget airline Sama is forced to reduce the number of flights on its domestic routes because of high fuel cost and discriminatory pricing in fuel cost, said its CEO Andrew Cowen. “Due to a combination of reasons such as the cap on economy class fare and the ongoing high fuel cost,” Sama's board of directors has asked management to consider suspension of all domestic flights until the situation improved, Cowen told Saudi Gazette during a media Iftar here Saturday. Sama's shareholders have put in additional financing of SR200 million but that will not solve Sama's dire situation on its domestic routes. The problem is about fuel cost, Cowen said. Saudi Arabian Airlines, the national airlines, gets a subsidized fuel rate but private operators like Sama pay the full market rate, “representing a cost difference of five times.” Sama cannot pass on the fuel price increases to the passengers, he said because of the cap put on economy class fare by the General Civil Aviation Authority (GACA). The cap was initiated some eight years ago but it has become unrealistic because of high inflation that has affected fuel cost. Cowen conceded that GACA has introduced extensive liberalization measures, “but there's this unfinished business that GACA needs to address, which is removal of the fare cap and ensuring that Sama is charged the same rate for aviation fuel as Saudi Arabian Airlines.” “Otherwise, we will be forced to reduce our domestic flights significantly and focus only on international routes,” he said. Flights to Madina were regularly 80 percent full, he said but the operational cost was too high. “So with great unhappiness, we had no choice but to suspend services to Madina until the situation improves.” On the Dammam-Riyadh route, Sama has halved the number of flights because each flight causes a loss of approximately SR40,000, he said. Sama has invested extensively in training and development of Saudi human resources, he said. “We also play a vital role in creating new job opportunities since 60 percent of Sama's employees are Saudi nationals.” On international routes, Cowen said Sama is doing well and recently launched Dammam-Beirut and Riyadh-Assiut flights. The airline plans to introduce new international routes in the months ahead under a ‘Just for you' initiative. The loyalty program will have a ‘fly 9 flights and get 1 free' offer, discounts up to 60 percent for early booking, and many other benefits, he said. __
